2.0 Introduction

Business’ today have opportunities to compete globally than ever before due to the rise and influence of free trade agreements such as North-American Free Trade Agreement (NAFTA) that does not only eliminate barriers for goods and services across borders but also know-how and the mobility of factors of production which includes expatriates among member countries. In conjunction, globalisation calls attention for an increasing need of expatriates so as companies that have established their firms in other parts of the world through joint venture, foreign direct investment, and what note could be managed, coordinated and controlled effectively as in the home country. In addition, transferring knowledge, ability and skills across units due to the host country experiencing shortage of labour or less qualified candidates is also a reason to an increase of expatriates, for instance, in China where they face the problem of shortage of labor due to the above reasons, they offer attractive contracts to expatriates due to their special skills (Peris et al., 2006).

An individual in Malaysia owning products made from Korea, China or Middle East is the simplest form of explanation of globalisation. However, many have attempted to define globalisation, nevertheless according to Hill (2009, p.6) ‘globalization refers to the shift towards a more integrated and interdependent world economy’.

People from different cultural background differ in business conducts and as claimed by Plum et al., (2008) cited in Karma and Vedina (2009), often most people face problems in adjusting their business conducts in international assignments since they take their culture practices as approved and a natural and right way to behave and think without taking into consideration the existence of cultural differences. Hence, the challenge arises among multinational co-operation in managing cultural diversity in which it is highly important for an expatriate to be able to work beyond their cultural boundaries and adjust or tolerate cultural differences in host countries cultural or organisational practices. Expatriates are defined as employees who are working and temporarily residing in a foreign location (Simeon and Fujiu, 2000).

As globalisation is being widely accepted and practised, it is practically inevitable. For this reason, the purpose of this study is to critically analyse the possible factors that contribute to the success and failure of expatriates in performing international assignments and its impact to their performance. Moreover, the importance of cultural intelligence (CQ) as a key success factor in the global business environment.

Cultural issues are increasing becoming important due to the fact that it partially determine the success of conducting business internationally due to the interaction of diverse people. The above claim is further supported by Rose and Subramaniam (2008) that cultural intelligence role is highly significant in predicting the cross cultural performance of expatriates and CQ is basically defined as ‘a person’s capability to adapt effectively to new cultural contexts’.

According to Avril and Magnini (2007) failure of expatriates can cost organisation to incur both direct and indirect costs, where by direct costs include remuneration package of the expatriate, relocation and compensation of the expatriate’s replacement and for indirect cost; unstable corporate image and misguided employees and so on. The above authors further added that the term failure of expatriates can generally mean that an expatriate have adjustment problems, low performance or ended an international assignment before the contract expired.

Research objective

The main purpose of this research paper is

• To critically examine whether there is a direct relationship between cultural intelligence and the success of expatriate’s in international assignments
• To assess the significant reasons which results to the success and failure of expatriates
• To evaluate the impact of the success and failure of an expatriates job performance
• To analyse the importance of CQ.

In a pace of globalisation and several individuals’ high degree of interest and initiative to study this particular subject which is new to a certain extent and rapidly growing, an increasing number of expatriate’s worldwide and a huge number of failure of expatriates, it is worth studying to acknowledge the potential role of cultural intelligence in cross cultural context. This paper theoretically explores the significance of expatriates characterised with CQ and it is highly contributed with familiar secondary data in a new method.

4.0 Research Questions

Does CQ play a significant role to the success of expatriates?

Does tolerance of cultural diversity play an importance to the success of expatriates?

Can a well managed cultural diversity lead to the success of expatriates?

Is there are link between expatriates spouse or family`s inability to adjust and expatriates performance?

5.0 Hypothesis

There is a correlation between the expatriates and spouse or family adjustment to the host country.

The reason for failure of expatriates is the variance between the culture of expatriates and the host country.

There is a positive impact between CQ and the success of expatriates.

6.0 Theoretical framework

CULTURAL

INTELLIGENCE

JOB

PERFORMANCE

SUCCESS OF EXPATRIATES

FAILURE OF EXPATRIATES

Literature review

As reported by Sims and Schraeder (2004) cited in Pires et al., (2006), 16 to 70 per cent of expatriate’s assignments have a probability to fail, in addition, according to (Shay and Tracy, 1997) Cited in Luthans and Farner (2002) failure rates are between 25 to 40 per cent when expatriates are assigned to developed countries and 70 per cent when expatriates are sent on international assignments to still-developing countries. In the contrary, Harzing and Christensen (2004) argue that the failure rates are not as high as they are predicted to be. Many have attempted to analyse the reasons behind the above reported percentage of failure rates and the factors that contribute to the success of other expatriates hence, the following report will examine the factors that influence the success, failure and ways to overcome the failure of expatriates.

Factors that contribute to the success of expatriate

Selection Process

Before an organisation selects a candidate for an international assignment, it is critical to analyse the candidates resume. According to Peterson (2002), the level of language fluency that the candidate has with the host country is an important element, without the candidate being able to communicate and express him or herself clearly and effectively with the new and different staff; it is unlikely for the work to be delegated and communicated successfully.

Moreover, Tye and Chen (2005) added that international experience and technical competency can also be determined in a resume. International experience technically trains an individual to inhabit the ability to generate suitable strategies in order to easily adapt in unfamiliar environment or situation and diverse people in which it is highly needed for an expatriate. In addition, if the resume includes that the examined candidate has specific skills to perform a task which the particular expatriate is required to carry out, it informs that the individual has technical competency in which it will build up the confidence that the expatriate has a potential to succeed.

Personality

Apart from the above, resume`s can only help to a certain extent in screening out unqualified candidates, however, examining personality as a factor that plays part in determining the success of an expatriate is necessary. Avril and Magnini (2007) claims that an applicant needs the following personal characteristics to succeed in the international assignment; the ability to adapt to different norms and modes of behaviour, high tolerance of ambiguity which usually results to stress if it cannot be controlled, communicativeness and emotional intelligence and so on. Such personal characteristics can be accessed through behaviour interviewing by hypothetical scenario`s and past behaviour questions.

However, on the other hand, Holopainen and Bjorkman (2005) further argued that it is practically normal for an individual to experience stress due to the environmental changes which eventually provoke stress factors such as ambiguity however, through their findings, they have concluded that high tolerance of ambiguity does not have a direct relation to the success of expatriates but communicativeness is necessary since the expatriate can communicate and express him/herself clearly. Research by Kumar et al., (2008) further supports by stating that ‘Expatriate personality has significant influence on job performance’

Goals

Goal orientation theory (Dweck, 1986; Dweck & Leggett, 1988) cited in Gong and Fan (2006) has been claimed to have provided a set of categorized system which points out the strength and weaknesses of individuals goal differences by differentiating there characters when faced with a set back by either a learning or performance orientation.

Focusing on learning oriented individual, an expatriate who is characterized as a learning oriented individual tends to attribute failure as his or her less inefficient strategies and foresee that increase effort will lead to success, in addition, he/she experiences less stress by perceiving feedback as suggestion in improving and not as criticism and lastly but the least, he/she continues to pursue challenging goals, implement different strategies and persist in improving the outcome of the failed task (Dweck, 1986) cited in Gong and Fan (2006). Therefore, such an individual experience less stress, frustration and anxiety which leads to a competent expatriate targeting in succeeding the assigned international assignment which will eventually reflect to his/her job performance.

Driving factors of expatriates failure and possible strategies to conquer expatriates failure.

In ability of spouse to adjust

An expatriate needs to spend ample of time at work to adjust and understand the business conducts of the new environment and his/her overall responsibilities while the family particularly the spouse who use to also busy with his/her career before being posted to another country is home alone with no friends or family and even if the spouse decides to tour around the new place, he/she has no clue concerning the direction plus he or she experiences language barrier and so on.

As a result, spouse fails to settle which eventually stresses up the expatriate and finally, it will directly affect the expatriate’s job performance. According to Webb and Wright (1996), many companies avoid confronting the issue of family during the selection of expatriates ho